By Moustafa Daly
St Kitts and Nevis government has recently announced a number of changes to its laws governing the country’s popular citizenship-by-investment program. These include outlining the appointment procedures for the president and board of governors of the Citizenship by Investment Unit (CIU) and specifying the investment thresholds for different investment options.
After June 30, 2023, the minimum amount to gain citizenship by investment in the Sustainable Growth Fund will revert back to $150,000 for the main applicant, $175,000 for the main applicant plus spouse, and $195,000 for the main applicant plus spouse in addition to up to three dependents, with $10,000 payable for any additional dependent after that. Until June 30, a Limited Time Offer applies which reduces the investment threshold to $125,000.
Changes affecting the real estate option of St Kitts’ CBI program
In regard to the real estate stream of the citizenship-by-investment, a series of new regulations were introduced aiming at tightly controlling the type of real estate property that can be purchased. First off, starting March 10, 2023, real estate properties purchased for the purpose of pursuing CBI must be held by the investor for at least seven years and can’t be resold, which remains an option for any properties purchased before that date. The $400,000 investment threshold in this category remains unchanged.
The restrictions on resale have caused some confusion in the industry.
“There may be some foreseeable issues as we have already begun to get a volume of queries regarding the real estate regulations,” said Stacey Ann Aberdeen, managing partner of Aberdeen Law. “In particular people appear to be confused about having to maintain and keep the free hold real estate for a period of seven years before and equating such with the right to have the passport taken away after the seven years. This of course is not what the regulations appear to be stating. In fact one can hold the property for seven year after which they can exercise their option to resell and also still hold their citizenship status after the resale.”
There is one extra condition that is particularly frustrating to Aberdeen, which is that the property can’t be resold unless seven years have elapsed since “the date of issuance of the formal legal document issued in favor of the main applicant to be the registered owner of the real estate unit,” according to the government. Aberdeen sees this as a significant drawback.
“This is a major concern for me as an international marketing agent and attorney as in my 12 plus years of dealing with real estate conveyance transactions there is a great amount of time lapse between closing of the real estate transaction and the date that appears on the legal document of the registered owner,” explains Aberdeen. “This will inevitably affect the legal owner's time as there is usually a gap between the time they acquire citizenship and the date on the legal ownership title. In my experience the applicant acquires citizenship months prior to, or in some cases a year before the date on their ownership of real estate documents,” she adds.
She continues: “This is the only major point that I have been grappling with and foresee challenges in the future especially since a lot of investors who acquire citizenship by investment through real estate uses such as an investment which they intend to resell after the requisite time period and having this new timeline of seven years from the date on their real estate title document as opposed to the date of citizenship creates challenges as time is of the essence.”
Also, a CBI investor can’t resell their property to others intending to use it for the purpose of pursuing CBI unless the latter investor makes ‘substantial further investment’ in the property, whether by adding further construction or renovation. The unidentified further investment has to be officially approved by the cabinet for the investor to qualify to apply for CBI.
It’s worth noting that two or more applicants can apply for CBI by purchasing the same property at the threshold of $400,000, as announced by the government.
As for real estate developers who have ‘Approved Projects’ for CBI investments, they must all reapply to maintain this designation by March 10, 2023, or else applicants purchasing units from these developers won’t qualify to apply for CBI.
Also, applicants must pay an initial sum of $200,000 into an approved real estate property before filing their applications, which shall be confirmed by the real estate developer.
Processing time for CBI investors in St Kitts
There are two different processing timelines for CBI applications; accelerated CBI applications and non-accelerated CBI applications, with the former taking up to 60 calendar days for a final approval/denial or delay with a stated cause, and the latter taking up to 90 calendar days.
The main difference here is that applicants seeking an accelerated route will have to pay a premium due diligence fee that reaches up to $20,000 for the main applicant and $10,000 for each dependent.
Additionally, applicants on the accelerated route must pay a post approval fee, which is due after CBI applications are approved in principle by the CIU, amounting to $35,000 for the main applicant, $25,000 for spouse, $15,000 for each dependent under 18 and $25,000 for each dependent over the age of 18.
For the non-accelerated route, the standard fees apply, which are set at $7,500 for main applicant and $4000 for each dependent. The post approval fee for applicants on this route is $25,000 for the main applicant, $15,000 for spouse, $10,000 for each dependent under 18, $15,000 for each dependent over the age of 18, and $30,000 for any dependent added after the approval-in-principle by the CIU.
Marketing St Kitts and Nevis’ CBI internationally
International marketing agents working on promoting the CBI program of the island must now apply for approval by the CIU board of governors and pay an application fee of $10,000, or risk being blacklisted by an official announcement on the Citizenship by Investment Unit’s website, according to the government.
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